They state it was unclear whether the information thief could gain access to users' credit cards as the numbers were encrypted. Sony indicated that it did not encrypt any of its other user records -- including username, real name, address, email addresses, and birth date. Those records were stored as plain-text and should be easily usable by a malicious party.

Passwords were not encrypted, but were hashed. They were reportedly not salted, which means reversing the hash should be feasible for a savvy cyber-criminal.

Kaz Hirai, Sony's executive deputy president, addressed the public in a streamed press conference [video] late last week, bowing deeply in the traditional Japanese expression of regret. He stated, "We offer our sincerest apologies"

The timeline of events in the intrusion has now become clearer. The intruder gained access between April 17 and 19, apparently having free reign of Qriocity servers. Then on April 19 Sony detected the intrusion and locked out the system.

The PSN service was shut down on April 20. Sony hired three independent firms to investigate the breach. It declined to notify users' though, until April 25.

II. Sony Offers Freebies to Lure Users

In its bid to regain users' trust and try to lure old and new users back onto PSN, Sony is offering its customers a number of freebies.

Leading the way is a limited offer for a 30 day free subscription to PSN for new users. For existing users, those who choose to remain will get a temporary 30 day boost to a "premium" membership level, which comes with special perks (free applications, etc.).

And Sony is offering to pay users' credit card renewal fees should they find themselves victims of identity theft. But it says it will require users to prove they suffered damage.

Users on Sony's blog seemed to be reacting positively to the company's updates and freebies program. Writes "mcbuttz78":

Tell all your staff thank you and we all really appricate (sic) every thing you guys are doing to keep the psn network going strong and better than before. It really means alot . We also at the psn legion would like to wish the sony sercurity (sic) team happy hunting and dont forget the old detective saying” to hunt a criminal in the dark is best case, becuase (sic) he never knows hit’ em

But some seemed less enthused. One user, "Jimmy_Cosmos" writes:

Just leave the PSN off, stop making PS3s and wait a year or two while building a much better & robust PSN network and launch the PS4. You’ve already given up on the PSP and the PSPGo. This gen is a disaster for you Sony. Rushing to build a brand new PSN in a few weeks is just asking for another disaster like you just had. How can you possibly be sure what you’re rushing to do in a couple of weeks will be better than what you’ve had to make secure in the past 5 years?

Some analysts think the damage will last for some time. States Jay Defibaugh, director of equities research at MF Global in Tokyo, in an interview with Reuters, "Damage has been done to Sony whatever the scale of the content giveaway at this point, and Sony is facing a prolonged effort to regain customer trust. Anything that undermines consumer willingness to divulge credit card details to Sony is a problem for the network strategy."

The breach has impacted customers worldwide in the North America and European regions. Customers in Asia may have been affected as well.

To clarify, Qriocity -- the entity who maintains the PSN and whom Sony has been referring to in third person in its blogs -- is actually part of Sony. The group offers streaming video and music services, in addition to maintaining Sony's online gaming efforts. The trade name was put in place in June 2010 and Sony has been referring to it in third person ever since. Some have complained that Sony is obfuscating its own role in the breach by sharing the blame with Qriocity in its releases, when in fact Qriocity is a part of Sony.

"We are going to continue to work with them to make sure they understand the reality of the Internet. A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis